You see someone win $1,000,000 on a show and think they’re set for life, right? Wrong.
What most people don’t realize is that winning big on reality TV actually has the potential to completely wreck your finances, and one TikTok star’s story perfectly illustrates why. Let me walk you through what really happens when those cameras stop rolling.
TL;DR: Reality TV winnings get taxed as ordinary income at your highest rate (up to 37% federal, plus state taxes). Many winners end up selling prizes just to cover the tax bill, and some face penalties for underpayment.
How La Fruta is Navigating His Winnings
La Fruta, a TikTok personality based in New York, won the grand prize on La Casa de Alofoke 2: RD$4 million in cash (roughly $60,000 USD) and a Ferrari Purosangue 2026, a super-luxury SUV worth about $398,000 and possibly more. While the show was filmed in the Dominican Republic, La Fruta is a U.S. resident, which means he owes federal and state taxes on the full fair market value of both prizes.
Add it all up, and he’s likely looking at over $460,000 in taxable income. At federal rates, that’s potentially $150,000+ in taxes owed… and that’s before New York state (up to 10.9%) and NYC local tax (~3.9%). In total, his tax burden could exceed $180,000.
La Fruta himself admitted on the show that he plans to sell the Ferrari, citing a desire to use the funds to buy an apartment and secure his future. That’s smart, and necessary. And honestly, he’ll likely need to liquidate the car just to cover the IRS and state tax bills.
This isn’t rare. We’ve seen it with clients and across the entertainment industry. When you win a prize, the IRS treats it as income and they want their cut whether you keep it, sell it, or never even take possession.
How Reality TV Winnings Are Actually Taxed
All Winnings Are Ordinary Income
Every dollar you win (cash, prizes, trips, cars) gets reported as ordinary income on your 1040. The show sends you a 1099-MISC (or 1099-NEC), and the IRS gets a copy too.
There’s no special “prize tax rate.” It stacks on top of whatever else you earned that year, which can easily push you into a higher bracket. If you made $50,000 at your day job and won $400,000 in prizes? You’re now in the 35% or 37% federal bracket for a big chunk of that.
Considering State Taxes
If you’re in Massachusetts (5%), California (up to 13.3%), or New York (up to 10.9% plus NYC tax), you’ll owe even more.
In La Fruta’s case, as a NYC resident, nearly half of his prize value could go to combined federal, state, and local taxes. (Fun fact: some states will even try to tax non-residents on game show winnings if the show was filmed in their state. For example, a non-Californian who wins prizes on a show taped in LA may owe California income tax on that prize, as game show winnings are typically considered state-source income in the filming location.)
Selling the Prize Won’t Help
A common misconception is “I’ll just sell the car/trip/boat I won; then I won’t have to pay tax on it.” Unfortunately, that’s not how it works. The IRS taxes you on the fair market value (FMV) of the prize at the time you won it, not on what you eventually sell it for.
What About Other Shows?
Love Island Winners Face Serious Tax Bills
Win $100,000 on Love Island? Congrats, but the couple is taking home maybe $60,000-$65,000 after federal and state taxes, depending where you live. The show may withhold 24% up front, but that often isn’t enough. You’ll owe the rest at filing.
One Season 5 winner of Love Island (Marco Donatelli) even joked repeatedly that he wanted to double the prize money before splitting it, knowing how much the IRS would take out.
The Price Is Right: The Original Tax Trap
Game shows like The Price Is Right are notorious for this. You win a trip valued at $10,000? You owe taxes on $10,000 of income, even if you’d never actually pay that much to take the trip yourself.
Win a car, a boat, and a living room set in one episode? You could be looking at $50,000+ in taxable prizes. Winners often:
- Sell prizes to pay tax bills
- Forfeit prizes they can’t afford to keep
- Call their accountant in a panic six months later
To illustrate, one former contestant shared her experience: she won a Chevy Cruze on The Price Is Right valued around $19,600. Before she could even drive it home, she had to pay roughly $2,067 in sales tax at the dealership. Then comes income tax: that car added nearly $20k to her taxable income, which (combined with California’s state income tax for winnings) resulted in about $9,000 owed in federal and state tax. In total, she paid roughly $9k for a car worth ~$19.6k. She ended up selling the car immediately for around $14,800, using part of that money to pay the taxes, and was left with only about $6,000 net profit. “You’re taxed on the retail value, not what you sell it for,” she noted, highlighting that the government got its cut based on the game’s sticker price, not her resale outcome.
The Penalties No One Warns You About
There’s another ugly surprise that reality TV winners (and other prize winners) often overlook: IRS underpayment penalties. When you have a big spike in income from a prize, the tax system expects you to pay as you go; either through increased withholding or through quarterly estimated tax payments. If you wait until the following April to pay all the tax you owe on the prize, you could get hit with penalties and interest for underpayment.
Let’s say you win in November and wait until April to pay. Unless you make an estimated payment by January 15, you could owe interest and penalties. The IRS expects you to pay as you go.
Safe harbor rules say you avoid penalties if:
- You owe less than $1,000 after withholding, or
- You pay at least 90% of what you owe for the current year by the deadlines
The IRS doesn’t care that the prize came late in the year. If you don’t plan properly, penalties can stack up fast.
How Do You Avoid This Mess?
Work With Tax Professionals Early
If you’re going on a reality show or game show, you should talk to someone who knows tax law BEFORE you go. Our team helps individuals across the country, so if you want to have a conversation about taxes, contact us. Getting advice early can save you from disaster.
Make Estimated Payments
If you win, calculate what you owe and make estimated payments. Don’t wait until April. Pay as you go to avoid penalties.
Consider Selling Prizes Immediately
There’s no shame in selling a $400,000 car to pay your taxes. Honestly, most people do it. It’s better than holding a liability you can’t afford.
Understand Fair Market Value
Shows often overvalue prizes. You’re taxed on the show’s number, not what it’s actually worth to you. That’s why many winners sell right away.
Whether You’re a TV Star or Not, It’s Important to Talk to a Tax Professional
At JBS Corp, we’ve helped clients across the U.S. untangle all kinds of prize and income situations. Whether you’re dealing with reality TV winnings, 1099 income, or trying to make sure you’re reporting everything correctly, we’re here to help.
Because here’s the truth: the IRS doesn’t care who you are. They don’t care if you were on TV or not. They just want their money, and they want it on time.
Need help figuring out your tax situation after a big win or just want to make sure you’re staying compliant?
JBS Corp is here to help businesses and individuals with tax planning, filing, and strategy. Whether you need tax help in MA or anywhere in the U.S., we’ll make sure you keep more of what you earn (and win). Reach out today – we’ve seen it all, and we know how to help.
